Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 (92 of 2020)

Schedule 5   Enhancing the integrity of the R&D Tax Incentive

Part 2   R&D clawback and catch up amounts

Income Tax (Transitional Provisions) Act 1997

49   After subsection 355-320(4)

Insert:

Application of Division 355

(4A) In applying Division 355 of the new Act in relation to the asset for the income year, if the R&D entity is entitled under section 355-100 of the new Act to tax offsets for one or more income years for deductions (the new law deductions ) under section 355-305 for the asset, the R&D entity is taken to have

(a) if an amount is taken to be included in the R&D entity's assessable income for the event year as mentioned in subsection (4) of this section - a clawback amount under section 355-446 of the new Act for the income year equal to the amount mentioned in subsection (4B) of this section; or

(b) if the R&D entity is taken to be able to deduct an amount as mentioned in subsection (3) of this section - a catch up amount under section 355-465 of the new Act for the income year equal to the amount of that deduction.

(4B) The amount is the following:

where:

adjusted section 40-285 amount means so much of the section 40-285 amount as does not exceed the total decline in value.

total decline in value means the asset's cost, less its adjustable value, worked out under Division 40 of the new Act as it applies as described in subsection (2) of this section.